Social Security Act 1989

1 Amendments relating to primary Class 1 contributions

(1) In section 4 of the principal Act, for subsections (6) to (6B) (computation of primary Class 1 contributions) there shall be substituted—

“(6) Where a primary Class 1 contribution is payable, the amount of that contribution shall be the aggregate of—

(a) the initial primary percentage of so much of the earnings paid in the tax week, in respect of the employment in question, as does not exceed the current lower earnings limit; and

(b) the main primary percentage of so much of those earnings as exceeds that limit but does not exceed the upper earnings limit;

but this subsection is subject to regulations under subsection (7) below or sections 128 to 132 below and to section 27 of the Pensions Act (contracted-out rates).

(6A) For the purposes of this Act the primary percentages shall be as follows—

(a) the initial primary percentage shall be 2 per cent.; and

(b) the main primary percentage shall be 9 per cent.;

but the rates of those primary percentages are subject to alteration under sections 122 and 123A below.

(6B) In the case of earners paid otherwise than weekly, any reference in subsection (6) above to the current upper, or (as the case may be) lower, earnings limit shall be taken as a reference to the prescribed equivalent of that limit.”

(2) In subsection (6F) of that section (alteration of number of primary or secondary brackets) the words “primary or” shall be omitted.

(3) In section 122 of that Act (additional power to alter contributions) for paragraph (a) of subsection (1) there shall be substituted—

“(a) the percentage rate specified—

(i) as the initial primary percentage in section 4(6A)(a);

(ii) as the main primary percentage in section 4(6A)(b);”.

(4) In subsection (4) of that section (variation of rates for purpose of adjusting Redundancy Fund) for paragraph (a) there shall be substituted—

“(a) the percentage rate specified—

(i) as the initial primary percentage in section 4(6A)(a);

(ii) as the main primary percentage in section 4(6A)(b);”.

(5) In subsection (6) of that section, for paragraph (a) (maximum variation in Class 1 rates of 025 percentage points) there shall be substituted—

“(a) to increase for any tax year—

(i) the percentage rate of the initial or main primary percentage, or

(ii) the percentage rate for secondary Class 1 contributions,

to a percentage rate more than 025 per cent. higher than the percentage rate applicable at the end of the preceding tax year for the primary percentage or secondary Class 1 contribution in question; or”.

(6) In section 123A of that Act (further power to alter certain contributions) for subsection (1) there shall be substituted—

“(1) For the purpose of adjusting amounts payable by way of primary Class 1 contributions, the Secretary of State may at any time make an order altering—

(a) the percentage rate specified as the initial primary percentage in section 4(6A)(a);

(b) the percentage rate specified as the main primary percentage in section 4(6A)(b).”

(7) In subsection (3) of that section, for paragraph (a) (limit on increase of primary Class 1 rates) there shall be substituted—

“(a) to alter the percentage rate of the initial or main primary percentage to a percentage rate more than 025 per cent. higher than the percentage rate applicable at the end of the preceding tax year for the primary percentage in question; or”.

(8) In section 134 of that Act (destination of contributions) in paragraphs (a) and (i) of subsection (4) (“appropriate national health service allocation” and “appropriate employment protection allocation”, when in force, to include specified percentage of earnings in respect of which primary Class 1 contributions were paid) after the word “paid” there shall be inserted the words “at the main primary percentage rate”.

(9) In Schedule 20 to that Act (glossary of expressions) there shall be inserted at the appropriate places—

““Initial primary percentage”;	“main primary percentage”;	“primary percentage”
See section 4(6) and (6A).	Construe “initial primary percentage rate” and “main primary percentage rate” as references to the percentage rates from time to time specified in section 4(6A)(a) or (b) as the initial or, as the case may be, main primary percentage.”

““Main primary percentage”

See “initial primary percentage”; “main primary percentage”;

“primary percentage” above.”

““Primary percentage”

See “initial primary percentage”; “main primary percentage”;

“primary percentage” above.”